USDCAD Overnight Range 1.2838-1.2914                

US Retail Sales were far better than forecast and traders bought US dollars, in part because it supports the view of a few FOMC members, that June is a live meeting. However, enthusiasm should be tempered since it was only last week that rate hawks were wringing their hands following the US employment report.

FX markets were jittery overnight.  The US dollar bounced around, within the confines of the recent ranges but with a bullish bias.  EURUSD attempted a move lower in Europe but it was short lived. That changed after the Retail Sales data.  EURUSD broke support at 1.1360 which was also the uptrend line from the beginning of March, which puts 1.1200 in play.  USDJPY rose steadily overnight and then exploded through resistance at 108.90 and touched 109.45 before retreating back to 109.00.  GBPUSD direction is still dominated by Brexit issues and the numerous articles citing downside risks to the UK if the “Leave” side wins are capping rallies. Weak China data increased the negative risk sentiment.

Oil prices have gotten a little support from Opec.  The Wall Street Journal reported that the Opec monthly report predicted non Opec production will shrink by 740,000 barrels/day in 2016 a bigger drop than previously predicted.

USD was in demand overnight and that trend has continued this morning, thanks to Retail Sales, a trend which should continue for the rest of the day.

USDCAD technical outlook

The intraday USDCAD technicals are bullish supported by this mornings breech of 1.2880, the downtrend line from Monday’s peak which now targets resistance in the 1.2940-70 area. A move below 1.2850 would negate the upside risk.

For today, USDCAD support is at 1.2860 and 1.2810.  Resistance is at 1.2920 and 1.2950.Today’s Range 1.2860-1.2930

Chart: USDCAD 30 minute